Citi's economist Willem
Buiter has found the solution to the economic crisis: central
banks need to print like mad.

Here's the nut of it:

We think central banks in the US, euro area, Japan and UK could
and should do much more, including

– (i)reducing rates, first by lowering them all the way toz ero
(UK and euro area),then by eliminating the effective lower bound
on nominal interest rates (all four currency areas)

– (ii) carrying out more imaginative forms of quantitativeeasing
(QE) & credit easing (CE), in all four currency areas, by
focusing on outright purchases of and/or loans secured against
less liquid and higher credit risk securities, subject to a
sovereign guarantee (joint and several in the euro area) for all
such risky central bank exposures

The idea of helicopter money is just that: Literally creating
money out of thin air, and distributing it to people, and not
sterilizing it with bond purchases or anything like that.

It would actually create inflation, help repair household balance
sheets, and it would be better than QE because the cash would not
get stuck in tehb anking system.

Argualy his more controversial call is where he talks about the
"effective lower bound" on interest rates, which refers to the
fact that it's not easy to lower rates when they're nominally at
zero, which they are now.

Buiter's solutions:

The obvious solutions are: (1) abolishing currency
completely and moving to E- money on which negative interest
rates can be paid as easily as zero or positive rates;
(2) taxing holdings of bank notes (a solution first proposed by
Gesell (1916) and also advocated by Irving Fisher (1933)) or (3)
ending the fixed exchange rate between currency and central bank
reserves (which, like all deposits, can carry negative nominal
interest rates as easily as positive nominal interest rates, a
solution due to Eisler (1932)).

Anyway, if Bernanke is even hesitant to do more QE at a time of
8.1% unemployment and inflation that's barely hanging on at 2%,
we don't see these happening anytime soon.